Nitin Gadkari, the Union Minister of Road Transport and Highways, has put forth a significant proposal regarding the taxation of hybrid vehicles. Speaking at News18’s Rising Bharat Summit 2024, Gadkari advocated for a substantial reduction in the Goods and Services Tax (GST) on hybrid vehicles. He proposed slashing the current 48 percent tax rate to just 12 percent, citing the environmental benefits of hybrid vehicles despite them not being as clean as electric vehicles. Gadkari emphasized that hybrids, being 60 percent electrically operated and emitting minimal pollution compared to internal combustion engine (ICE) vehicles, should not bear the burden of a high tax rate.
Presently, electric vehicles in India enjoy a 5 percent GST, while hybrids face disproportionately higher tax rates. Gadkari aims to rectify this imbalance by incentivizing the adoption of hybrids through a reduction in GST. He believes that such a move would not only contribute to a cleaner and greener future for India but also stimulate growth in the automotive sector. Gadkari has urged the Finance Minister to address this issue at the upcoming GST Council meeting, highlighting the potential positive impact on the automotive industry and the overall economy.
Furthermore, Gadkari has underscored the importance of Flex-fuel technology as another clean mode of transportation. He has been advocating for the adoption of flex-fuel powered vehicles, which can seamlessly switch between 100 percent petrol or ethanol fuel. Gadkari himself owns a Toyota Innova equipped with a flex engine, showcasing the benefits of this technology in reducing dependence on imported fossil fuels while offering a cost-effective and environmentally friendly transportation solution.